When IT Meets Politics

Apr 19 2009   6:18PM GMT

Copyright Wars and the future of Digital Britain

Philip Virgo Profile: Philip Virgo

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Outlaw.com

Last week saw the Digital Britain Summit and the conviction of Pirate Bay The stakes could not be higher. The UK comes bottom of the 16 nations looked at by Consumers International, when it comes to protecting consumer rights, according to a recent article in Outlaw.Com. Nor is it much better at protecting the rights of those whose material is used to attract traffic to offshore, advertising funded, websites.      

The Digital Britain summit revealed how much and how little UK debate has advanced in recent years

The Prime Minister said that Digital Britain was at the heart of our economic recovery.

But most corporate players are still trying to sweat past investment and eat each others’ lunch as we sprial downwards into recession.

Where is the focus on finding business models that reward those who invest in the new infrastructure and content that will get us out of recession?

In this context it was disappointing to see the Managing Director of BT defend its failure to deliver fibre to the home on grounds of lack of demand – as opposed to describing the rating, regulatory and policy changes necessary to cut the cost/risk of that investment and increase the reward to shareholders for providing the ncessary funds.

Thre is a similar lack of forward thinking in debate on the plans for A Rights Agency. In this context  Andrew Yeomans‘ second submission to the Digital Britain consultation may be apposite.  

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Digital Rights Agency

 

I believe your report on “What role for a Digital Rights Agency?” has many good ideas. However the main thrust seems to be concentrated on the older traditional business model of creating revenue through artificial scarcity, rather than encouraging a new model of creative abundance. There is a great opportunity for Great Britain to try new ways of revenue generation, largely within the current copyright legislation, with the aim of expanding the market and fostering creativity from new sources as well as old.

 

Certainly it would help content creators if, as you suggest, there was a rights agency to facilitate rights clearance in a cost-effective way. I suspect such an agency might need more than a “light touch”, and may need significant representation from the content creators, to avoid any clearance fees being set so high as to discourage new business models. The US fees set for internet radio seem to bear this out, pricing new businesses out of the market.

The proposal I briefly outlined in my previous letter on “Digital Britain” has a different focus to traditional models of artificial scarcity. Instead, I would hope to transform illegal copyright infringement into legal distribution and promotion of creative material. I’m sure most creators would welcome the distribution of their works through any possible channel, if only they could collect revenue from it.

 

The main way of making this change is to move the revenue collection from the distribution mechanism to the point of use. While it would be technically possible to collect copyright usage figures from end-user devices (in fact, many music players already count the number of times songs are played), a regime of compulsory data collection would naturally be regarded as intrusive by the public. Instead, I’m proposing statistical sampling of use, in a similar manner to the way television viewing figures are generated – namely by encouraging volunteers to collect their usage figures and create a statistically valid approximation for the whole population. That would be a fair and extremely cost-effective way of assessing how copyright revenues should be distributed.

 

There would be winners and losers compared with the current regime – those who created popular works which were “performed” many times by individuals would gain, those whose works were “performed” at most once would not get so much reward. But to me this seems a fairer method, which also encourages the creation of works with longevity – and those are the works that most benefit UK PLC as well as the rights owners.

 

There remains the issue of how to collect the copyright royalties. Current royalties for the music industry in the UK run around £20 per person per year, I believe. This is such a small figure that it seems overkill to create complex systems of collection – the simplest approach would be a flat sum funded by the government and included in the normal tax collection regime. Alternate methods could be investigated, such as linking fees to internet use; though I suspect these might prove rather less popular than an apparently “free” “creativity tax”. If it was desired to offer an individual “opt-out” then the BBC TV licence model could be used; though even this seems to have disproportionate collection overheads compared to a flat tax.

 

Under that model, consumers or businesses could obtain a blanket annual licence to legally cover their use of copyright material. It would be likely that any collection mechanism might need to be supplemented by an additional licence, permitting additional uses. I am sure many businesses would like to be able to have limited legal use of copyrighted material, for use in sales brochures and presentations as an example, and would be happy to pay an proportionate blanket fee for such use. And if the content creator received an appropriate remuneration without the need to negotiate rights, that would be an extra benefit.

 

It would be desirable if this type of rights agency could also represent less commercial content creators, including private individuals and non-media companies. Most such creators would be unlikely to earn more than a small fee, below the level that would actually require payment; but if a work proved unexpectedly popular, they would be entitled to rewards which they might have foregone under the current system, due to the current difficulty of collection. Such a guarantee would therefore encourage creative work and also would encourage discovery and marketing of good but obscure work.

 

This type of collection rights agency scheme could be introduced in parallel with the existing copyright scheme, but to be effective would require a large number of copyright works to be included in the scheme. By providing a central fund, which could only be used for works within the scheme, incentives would be provided to enter the scheme. Combined with appropriately valued compulsory licences, which would remove exaggerated valuations, I would hope that a mutually beneficial new business model could be created.

 

Your report discusses registration of copyright. I would suggest that registration with the rights agency would be highly desirable to facilitate appropriate revenue distribution. It would also provide a copyright archive, analagous to the current copyright libraries. A highly valuable resource for the future – otherwise there is a significant liklihood that much of today’s digital content will be lost to posterity in obsolete formats and media, or never archived at all. Ssuch an archive would also discourage a commercial organisation from gaining a monopoly on new digital content.

 

Initially I would expect a collection and rights agency to cover musical works, as that is where there is significant commercial concern. But it could be extended to video, incuding commercial and amateur productions, to photographs, to software. Each may require different rates of reward; but again, if set appropriately, can provide an incentive for less commercial channels to provide works. Thus expanding the market, rewarding creative talent, and benefitting UK PLC too.


A picture comes to my mind when reading the report, of a new King Canute (the Rights Agency) commanding the waves of internet distribution and file sharing to turn back; when it would be much greater benefit to install a wave-powered generation system instead. I hope you too can take a creative approach and generate rewards for all.

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I do not know that I entirely agree with Andrew but I do like his image of King Canute. Remember, however, that Canute was no fool. He was demonstrating to his Courtiers the limits of his power. Lord Carter has talked of the importance of working with market forces to bring about change. The rise of the US publishing industry was based on ignoring European copyright. The rise of Hollywood was based on ignoring the Edison patents. Will the digital recovery from recession be based on similarly trampling over the rights of the past? Or will we find a better way?   

 

It takes two to tango – but this dance looks more akin to the sixty-foursome reel in the “General Danced at Dawn”. Buy the book to find out what happened.   

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